…FG to consider financial performance, operational efficiency
The federal government excited investors on Tuesday with the announcement of plans to float three power assets on the Nigerian Exchange (NGX).
The Bureau of Public Enterprises (BPE) revealed that it would list two electricity distribution companies (DisCos) and one generation company (GenCo) on the NGX.
Fresh details have since emerged on how the plans will be implemented. Sources familiar with the plan told BusinessDay that the choice of assets to be listed on the NGX will be based primarily on financial performance and operational efficiency.
The move, BusinessDay previously reported, is part of broader efforts to reform the power sector and deepen capital market participation.
The final shortlist of assets is expected to include two ‘best-in-class’ power assets in the South and one in the North — likely in Abuja — according to people familiar with internal discussions.
Insiders said the listings will be designed to attract both institutional and retail investors.
“This is not about taking underperforming companies to the market,” a senior government source involved in the process said. “The plan is to take the best to the Exchange.”
The BPE, led by Ayodeji Gbeleyi, its director general, is currently working with the National Economic Council (NEC) to resolve equity-related issues with state governments that have ownership stakes in some of the assets.
Read also: Stocks lose N596bn as profit taking persists on NGX
Sources said the collaboration aims to ensure that the states’ interests are factored in before the transactions progress.
“The BPE is collaborating with the National Economic Council to secure buy-in from state governments to determine the actual equity stakes they own in the targeted power assets and be able to yield such to them at the appropriate time,” one official familiar with the discussions told BusinessDay.
The timing of the listings — to be concluded ahead of the 2027 elections — is seen as critical, both politically and economically. The government plans to use the transactions to send a strong message around transparency, reforms, and inclusive economic participation.
“Government wants to make a strong statement that ordinary Nigerians should be able to have stakes in the power assets that have been privatised,” the source said.
Profitability is emerging as the key filter. Several DisCos, once considered financial drains, have turned profitable in the wake of recent tariff reforms — particularly the introduction of the Band A tariff regime, which allows for higher billing rates in exchange for more reliable power supply.
“The Band A strategy has really helped,” one source noted, adding that Discos that adapted quickly to the model have seen substantial revenue improvements, making them viable candidates for market listing.
The push to list the assets on the NGX is driven by three core objectives: improving governance, enhancing capital access, and democratising asset ownership, BusinessDay was told.
Officials believe that a public listing will impose market discipline on the utilities, boost operational transparency, and crowd in long-term capital from both domestic and international investors.
“This is not just a policy statement anymore — this is now an active transaction,” another individual directly involved in the listing preparations said.
“The mandate is to list the best-performing assets, deepen market participation, and get it done before 2027.”
Gbeleyi had first hinted at the listing plan on Tuesday, noting at a press briefing in Abuja that two Discos and one Genco were being considered for the NGX. He declined to offer further details on the asset names or listing timeline at the time.
Although Nigeria’s power privatisation programme, launched in 2013, was initially aimed at improving service delivery and financial sustainability, results have been mixed. Many DisCos have suffered from underinvestment, governance issues, and tariff shortfalls. However, recent reforms — including cost-reflective tariffs and increased regulatory enforcement — have begun showing results in certain parts of the sector.
Market analysts, however, say the success of the upcoming listings will now depend on transparent valuation processes, robust investor engagement, and strong regulatory oversight.
Read also: BPE to list 2 Discos, one Genco on stock exchange
As final valuations progress, analysts believe that intergovernmental coordination is required to unlock any legacy equity complications involving state-level shareholders. They however worry that the transaction also faces a narrow timeline, with just over two years left before the next general elections.
But government officials insist the momentum is real and building. “We are past the idea stage,” one government adviser said. “This is now about execution. The assets are being evaluated, the market timing is being assessed, and the political will is there,” the adviser added.
Global best practice
BusinessDay gathered that the move is in line with what obtains in other emerging markets in the world.
India, world’s most populous nation, listed most of its power assets on the stock market, including NTPC Limited, India’s largest energy conglomerate.
Other listed electricity companies in India include: Power Grid Corporation, Adani Power, Tata Power, JSW Energy, among others, with a market capitalization of $260 billion. China also has its power assets in its stock exchanges.
“In China alone, power assets listed on the stock market are valued at nearly $400 billion in market capitalisation,” said Ike Ibeabuchi, an Abuja-based emerging markets analyst.
“Over there, you have independent power producers such as China Yangtze Power and China National Nuclear Power listed. Renewable energy companies are also in the market. And they have about three stock exchanges. This is something Nigeria can copy to deepen the NGX. However, you need the buy-in of all the companies and stakeholders for this to work,” he added.
